Japan’s senior trade officials skipped the APEC Ministers Responsible for Trade meetings held last week on South Korea’s Jeju Island.
Neither Minister of Economy, Trade and Industry Yoji Muto nor Prime Minister Shigeru Ishiba’s top trade negotiator Ryosei Akazawa attended the event, missing an opportunity to talk with US Trade Representative Jamieson Greer. Masaki Ogushi, a member of Akazawa’s negotiating team, represented Japan in their stead.
Unlike the UK, Japan is in no hurry to reach a disadvantageous or incomplete trade deal with US President Donald Trump, particularly with elections to the upper house of Japan’s national assembly coming up in July. And unlike the South Koreans, the Japanese are not seeking a low-key compromise.
The impact of 25% tariffs on autos and auto parts on the Japanese economy is simply too great, and America’s renewed assault on Japan’s rice farmers is too sensitive to tolerate.
Ishiba already leads a minority government, his Liberal Democratic Party having lost its majority in the lower house last October. Now he must either stand up for Japan or risk losing the party’s majority in the upper house as well.
Akazawa is expected to visit Washington, DC, for a third round of formal negotiations later this month, perhaps within the coming week. While Ogushi was in South Korea, he met with Chief Cabinet Secretary Hayashi Yoshimasa to discuss strategy. After that meeting, he told the press, “My focus is on our national interests, to protect what needs to be protected and to say what needs to be said.”
Established in 1989 at the suggestion of Australian Prime Minister Bob Hawke, Asia-Pacific Economic Cooperation (APEC) describes itself as “a cooperative, multilateral economic and trade forum.” Its 21 members include most of the economic entities around the Pacific Ocean.
The People’s Republic of China, Chinese Taipei and Hong Kong are all members. In an unusual recognition of geographic reality, the Russian Federation is also a member. North Korea is not.
The complete list of members is: Australia, Brunei Darussalam, Canada, Chile, People’s Republic of China, Hong Kong, Chinese Taipei, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Thailand, the US and Vietnam. APEC’s mission is laid out at this link.
On its website, APEC answers the question “What Does APEC Do?” with “APEC ensures that goods, services, investment and people move easily across borders.” Except that it does not and cannot do so, because “There are no binding commitments or treaty obligations. Commitments are undertaken on a voluntary basis.”
In principle, the US, which now champions protectionism, restrictions on investment, reversing the process of economic integration and discouraging or forbidding economic and technical cooperation, no longer qualifies for membership in APEC. But in practice, there is no established procedure for expulsion of a member who works in opposition to the organization’s mission.
According to some media reports, Australia, Canada, Russia and Singapore joined Japan in not sending their most senior trade representatives to Jeju, implying displeasure with Donald Trump’s combative protectionism. However, official announcements from the respective governments do not support this view.
Regardless of what they think about Trump’s extremely high tariffs and belligerence, diplomacy prevailed and the 21 participants in the APEC meetings issued a joint statement declaring that: “We remain committed to the Putrajaya Vision 2040, including through the implementation of the Aotearoa Plan of Action to build an open, dynamic, resilient, and peaceful Asia-Pacific community for the prosperity of all our people and future generations.”
Putrajaya Vision 2040, endorsed by APEC leaders in 2020 in Malaysia, aims “To ensure that the Asia-Pacific remains the world’s most dynamic and interconnected regional economy.” To this end, APEC “will continue to work together to deliver, a free, open, fair, non-discriminatory, transparent and predictable trade and investment environment.”
The Aotearoa Plan, announced in 2021 in New Zealand, lays out specific actions to be taken in order to realized the Putrajaya Vision, among them promotion of a market-driven digital economy, policies to support innovation, and support for “global efforts to comprehensively address all environmental challenges, including climate change, extreme weather and natural disasters, for a sustainable planet.”
This aligns neither with Trump’s intent to Make America Great Again nor his withdrawal from the Paris Agreement on climate change and roll-back of environmental protection in the US. Washington, DC, is a long way from Malaysia’s Putrajaya and New Zealand’s Aotearoa.
The joint statement issued in Jeju also notes that:
“We recognize the importance of the WTO to advance trade issues, and acknowledge the agreed upon rules in the WTO as an integral part of the global trading system. We recognize the WTO has challenges and needs meaningful, necessary, and comprehensive reform to improve all its functions, through innovative approaches, to be more relevant and responsive in light of today’s realities. We commend the efforts to deepen discussions in the WTO on contemporary trade issues.”
This may be interpreted as indirectly addressing the US complaint, which dates from the Obama administration, that the WTO has allowed itself to be taken advantage of by China. But the fact remains that the US has crippled the WTO by blocking appointments to its appellate body, which now sits vacant. Furthermore, at the end of March, it was reported that the Trump administration has put US funding for the WTO under review.
This has allowed Japan to once again assert itself as a leading proponent of free trade. On May 13, Ishiba received a courtesy call from WTO Director-General Ngozi Okonjo-Iweala on the occasion of the 30th anniversary of the establishment of the WTO. The Director-General “expressed her expectation for the role of Japan as a champion of the multilateral trading system” and both of them emphasized that “now is the time” to unite and address the challenges facing the WTO.
During her working visit, Okonjo-Iweala also met with Japanese Foreign Minister Takeshi Iwaya, Finance Minister Katsunobu Kato and Economy, Trade and Industry Minister Yoji Muto. Okonjo-Iweala and Iwaya issued a joint statement declaring that “the value of the multilateral trading system is unquestionable.”
Fomer Japanese Prime Minister Shinzo Abe was instrumental in the establishment of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the trade agreement that replaced the Trans-Pacific Partnership (TPP), which collapsed after Trump abandoned it in 2017. The CPTPP, which does not include China, took effect in 2018.
Japan has also played a leading role in Regional Comprehensive Economic Partnership (RCEP), an exclusively Asia-Pacific trade agreement that took effect in January 2022. RCEP does include China and may eventually include India.
In Japan, the Constitutional Democratic Party, the country’s largest opposition party, is also a strong supporter of the multilateral trading system. There is a national consensus supporting free trade and opposing its subversion by the US government.
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